Buying and moving into a new home is one of life’s great experiences, especially if you’re buying your first home. From getting that pre-approval to the “yes!” response on an offer to closing and moving in, every step is exciting. And while the process is engaging and fun, it’s important to prepare for moving day […]
Pros and Cons to No Cost Mortgage, Missouri
When people in Missouri hear that they have an option for a zero cost mortgage, their first thought is that it is too good to be true. But it is true; zero cost mortgages are available for people living in Missouri. Getting a mortgage in Missouri with no closing cost may seem more attractive to buyers with limited funds. However, if you choose this option, you have to consider that you are still paying for the closing costs, they are just not upfront. Mortgage professionals will provide a borrower with a zero closing cost in exchange for a higher interest rate. So in reality, you are just paying them over time.
It is important to understand that you are rolling in your closing cost with the purchase price of your home. On the positive side, the only upfront fee you are paying for is a down payment which could allow you to stay with a lower interest rate. However, even though this may be cheaper, it’s still a good plan to compare the monthly payments under each option. You also want to consider how long you intend to be living in the home.
Lastly, if you decide to do a no-cost loan it would be wise to research different Missouri lenders. Even with the zero upfront closing cost, this may not include other fees. Some lenders will not cover some costs and still have you pay mortgage insurance and property tax upfront. So it is important to look at your options and find out the specific costs that are included in the mortgage.The above information is for educational purposes only. All information, loan programs and interest rates are subject to change without notice. All loans subject to underwriter approval. Terms and conditions apply. Always consult an accountant or tax advisor for full eligibility requirements on tax deduction.